New Water Allocation Management Framework for New Zealand

New Zealand has abundant freshwater, on an average annual basis. However, water demand has grown, in many areas, to the point where shortages occur because the spatial and temporal patterns of supply do not match demand patterns.

Current water allocation frameworks have been developed with the goal of making water available for taking while avoiding adverse effects on instream values when rivers are in a low-flow state. Water made available for taking is allocated on a “first-in, first-served” basis. As demand for water has increased, and as the available resources have come under increasing pressure, these frameworks have become less and less able to manage the increased complexities and the cumulative effects of water takes. Climate variability on decadal and longer timescales adds to the complexities of water allocation management, further exposing the inadequacy of current allocation frameworks.

Current water allocation frameworks provide neither adequate protection of environmental and instream values nor adequate flexibility for maximising the value derived from water set aside for taking. They are also expected to become administratively expensive as more catchments become fully allocated. While ongoing refinements are being made, there is a need to develop a new framework that is based on the premise of a limited water resource and, in that context, provides better protection of environmental and instream values, and a robust cost-effective mechanism for re-allocation of water so that supply transfers to the highest value uses.

This study was commissioned to develop a new framework for sustainable water allocation management that combines statutory planning with market-based mechanisms. The core paradigm shift is moving from effects-based management of an unlimited resource to value-based management of a capacity constrained resource. The overall goal is to “allocate water to the highest value use, after first accommodating the needs of public interest; including the environment, Maori, power generation, recreational fishing, agricultural, tourism and wider business interest.” (NZBCSD Water Project Charter 2006).